Affluent Investors Increasingly Concerned with Broader Economy, Poll Says

Listening to the U.S. Presidential debate last Friday, one could be forgiven for thinking it was only the lower and middle-classes who are concerned about the welfare of the economy. But a survey of affluent investors reports a new all-time low in the economic outlook for those with more than $500k to spare, according to the Chicago-based consulting firm Spectrem Group.

The Spectrem Affluent Investor Index, which measures the investment outlook of households with at least $500k in investable assets, fell 9 points to a new all-time low of -22 in September. The previous low was a -20 reading in March.

"Affluent concerns about the economy doubled from June as the nation's wealthiest investors worked to understand that impact of this financial turmoil," said George Walper, president of Spectrem Group.

Meanwhile, the Spectrem Millionaire Investor Index, which looks at those with more than $1 million in investable assets, also hit a new low at -18 after falling 9 points over the month.

"Affluent Americans and millionaires alike saw their investment outlook fall to record lows in September, a tumultuous month that saw the government take control of Fannie Mae and Freddie Mac, a U.S. bailout of AIG and the fall of Lehman Brothers," Walper added.

Interestingly, nearly 40% of affluent investors cited the economy as the most serious threat to their financial goals, which doesn't bode well for those hoping the financial turmoil will be contained to Wall Street. Only 13% said market conditions were a graver threat, while 11% said results from the presidential election constituted the most important factor, 5% said rising unemployment was a top concern, and 4% cited housing and real estate.

When the same question was asked in June, just 19% cited the economy as the most serious threat to investments.

By Patrick McGee and edited by Sarah Sussman
©CEP News Ltd. 2008